Mezzanine Financing

Mezzanine & Preferred Equity Financing

Mezzanine and preferred equity fill the gap between senior debt and common equity in the commercial real estate capital stack. These subordinate capital positions allow borrowers to increase total leverage beyond what senior lenders provide, reducing the equity required for acquisitions, developments, and recapitalizations.

Apply for Mezzanine Financing →

Key Features

Mezzanine & Preferred Equity at a Glance

Loan Amount

$5M - $50M+

Term

1 - 5 Years

Rates

10% - 18%

Position

Behind Senior Debt

Structure

Interest-Only or Accruing

Total Leverage

Up to 85-90% LTC

Overview

Mezzanine Debt & Preferred Equity Financing

Mezzanine debt is secured by a pledge of ownership interest in the borrowing entity rather than a mortgage lien on the property, while preferred equity involves an actual equity investment with a preferred return. Both serve a similar function — increasing leverage and reducing sponsor equity requirements. These structures are commonly used for value-add acquisitions, development projects, and recapitalizations where senior lenders cap at 65-75% LTV.

Lender Sources

Debt Funds
Private Equity Firms
Family Offices
Insurance Companies
Specialty Lenders

Ideal For

High-leverage acquisitions
Development projects needing additional capital
Value-add strategies with equity gap
Recapitalizations and cash-out scenarios
Joint venture equity structures
Portfolio-level capital solutions

Mezzanine & Preferred Equity by City

Bridgeport-Stamford, CT

Hilton Head Island, SC

Related Property Types

Mezzanine & Preferred Equity are available for all major commercial property types. Explore financing by property category.

Related Insights

Educational

Mezzanine & Preferred Equity in Palm Springs: What Borrowers Need to Know

Everything you need to know about mezzanine & preferred equity in Palm Springs, including current rates, qualification requirements, capital sources, and market-specific strategies for commercial real estate borrowers.

Trevor DamyanApril 23, 2028

Educational

Mezzanine & Preferred Equity in Santa Cruz: What Borrowers Need to Know

Everything you need to know about mezzanine & preferred equity in Santa Cruz, including current rates, qualification requirements, capital sources, and market-specific strategies for commercial real estate borrowers.

Trevor DamyanApril 22, 2028

Educational

Mezzanine & Preferred Equity in San Luis Obispo: What Borrowers Need to Know

Everything you need to know about mezzanine & preferred equity in San Luis Obispo, including current rates, qualification requirements, capital sources, and market-specific strategies for commercial real estate borrowers.

Trevor DamyanApril 21, 2028

FAQ

Mezzanine & Preferred Equity FAQ

Mezzanine financing is subordinate debt that sits between senior mortgage debt and equity in the capital stack. Secured by a pledge of ownership interest rather than a property lien, mezzanine debt allows borrowers to increase total leverage to 80-90% of value while reducing their equity requirement.

Mezzanine debt is a loan secured by a pledge of the borrower's ownership interest, with fixed payments and foreclosure rights. Preferred equity is an actual equity investment with a preferred return, participating in ownership rather than lending. Both fill the gap between senior debt and common equity.

Mezzanine loan rates typically range from 10% to 18%, reflecting the higher risk position behind senior debt. Rates depend on the total leverage, property type, sponsor strength, and market conditions. Preferred equity returns are similar but may include additional upside participation.

Consider mezzanine financing when you need higher leverage than senior lenders will provide alone, want to reduce your equity requirement for an acquisition or development, are executing a value-add or development strategy, or need to recapitalize and pull equity from an existing property.

Yes. Most senior lenders require approval of any subordinate financing, including mezzanine debt. This involves an intercreditor agreement between the senior and mezzanine lenders that outlines rights, remedies, and priorities in the event of default.

Ready to Get Mezzanine Financing?

Contact Commercial Lending Solutions for a free, no-obligation quote on mezzanine & preferred equity. We respond within 24 hours.

Apply for Financing →

Call: 310.708.0690 Text: 310.758.3064

Mezzanine & Preferred Equity Financing

Mezzanine & Preferred Equity at a Glance

Mezzanine Debt & Preferred Equity Financing

Lender Sources

Ideal For

Mezzanine & Preferred Equity by City

Related Property Types

Related Insights

Mezzanine & Preferred Equity in Palm Springs: What Borrowers Need to Know

Mezzanine & Preferred Equity in Santa Cruz: What Borrowers Need to Know

Mezzanine & Preferred Equity in San Luis Obispo: What Borrowers Need to Know

Mezzanine & Preferred Equity FAQ

Ready to Get Mezzanine Financing?

Weekly Market Intelligence

Before You Go…

Thank You!